U.S. nonfarm payrolls rise by 235,000 jobs in February, unemployment rate falls to 4.7%
U.S. employers hired workers at a robust pace in February, beating expectations, and wages grinded higher, which could give the Federal Reserve the green light to raise interest rates next week despite slowing economic growth.
Nonfarm payrolls increased by 235,000 jobs last month as the construction sector recorded its largest gain in nearly 10 years due to unseasonably warm weather, the Labor Department said on Friday. The economy created 9,000 more jobs in December and January than previously reported.
Fed Chair Janet Yellen signaled last week that the U.S. central bank would likely hike rates at its March 14-15 policy meeting. Job gains have averaged 209,000 per month over the past three months. The economy needs to create roughly 100,000 jobs per month to keep up with growth in the working-age population.
“By any measure this report is consistent with an exceedingly healthy labor backdrop and, I think more critically, it’s a number that will embolden the Fed to raise rates in March,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York.
U.S. short-term interest rate futures initially rose after the data, while prices of U.S. Treasuries pared earlier losses. U.S. stock index futures were trading higher, while the dollar .DXY was weaker against a basket of currencies.
Last month’s brisk clip of hiring was accompanied by steady wage growth, with average hourly earnings rising 6 cents, or 0.2 percent. January’s wage growth was revised up to 0.2 percent from the previous 0.1 percent gain. That lifted the year-on-year increase in wages to 2.8 percent from 2.6 percent in January.
The unemployment rate fell one-tenth of a percentage point to 4.7 percent, even as more people entered the labor market, encouraged by the hiring spree. Economists polled by Reuters had forecast employment increasing by 190,000 jobs last month.
The labor force participation rate, or the share ofworking-age Americans who are employed or at least looking for a job, increased one-tenth of a percentage point to 63 percent, the highest level since March 2016.
